November 1, 2013

1) In the staff report on MOFD's 2012/13 audited financials, MOFD's new Administrative Service Director (CFO), Gloriann Sasser, right up front described how MOFD's general fund reserve, which was shown as $3.5 million on 6/30/2012, has been completely depleted by using $1.5 million for operational shortfalls during the year and the remaining $2 million was used to make a scheduled payment on the Pension Obligation Bond on 7/1/2013.  It was noted that the $3.5 million balance on 6/30/2012 should have been reduced by $2 million to cover the bond payment the next day.

2) In addition, the General Fund had to borrow $88,000 from the Capital Fund leaving the Capital Fund at $3.52 million.

3) In addition, Payables and Receivables netted out to $250,000 net due (exactly when this is due is not specified), so netting this out of the Capital Fund leaves $3.27 million.

4) In July 2013, after the accounting period ended, MOFD spent $1.2 million of the Capital Fund on property for a proposed Station 46, leaving that fund with about $2 million in cash.

5) The annual budget shows $20 million General Fund expenditures.  $2 million was spent on day one of the new fiscal year making the Pension Bond payment, leaving $18 million to be spread over the next 12 months; an average of $1.5 million per month.

With only $2 million "in the bank", will MOFD have the cash to meet its payroll and other obligations before tax revenue for 2013/14 is received?

Should MOFD produce, for itself and the community, a "Short Term Financial Plan"?  Showing how it will have the cash to meet its obligations over the next 12 months on a month-by-month basis.  Can the community continue to assume that the bills will be paid and the stations will remain open?

Attached are:

a) The staff report to the 2012/13 audited financials (with comments)

b) The balance sheet from the 2012/13 financials (with comments)

c) The final 2013/14 General Fund budget